Finally, cast the point into IGeometry5 and call ProjectEx, passing the target spatial reference and the geotransformation. IPoint.X and IPoint.Y should then represent longitude and latitude of the point where the user clicked.

If you use the identify tool to click anywhere on the map, you can change the type of units displayed in the location bar. There is a (very tiny!) button at the end of the location bar that when clicked will open a menu displaying a list of unit types to display. Simply select Decimal Degrees or D/M/S to get your lat/long.

edit: Here's a screenshot:

Another simple option is to switch your display units to Decimal Degrees (Data Frame Properties, General tab - set Display: to Decimal degrees). Then you can see the units in DD displayed at the bottom/right as you move the mouse cursor.